The German state on Thursday injected a further €10bn into Commerzbank and took a 25% stake to shore up the country’s second-largest lender and enable it to complete the takeover of Dresdner Bank, its ailing rival. The capital increase, which in effect partly nationalises Commerzbank, comes two months after the bank received €8.2bn in aid from Germany’s financial sector bail-out fund. It is also less than six weeks since Commerzbank renegotiated the terms of the deal with Allianz, the insurance giant that controls Dresdner. So much for Germany’s lectures to others on the dangers of state aid, says Lex. More analysis here.

This entry was posted by Gwen Robinson on Friday, January 9th, 2009 at 5:55 and is filed under Capital markets. Tagged with commerzbank. Edit this entry.